TAIPEI (Reuters) - While Foxconn chairman Terry Gou enters Taiwan’s rancorous political arena free of any political baggage, he could yet find himself weighed down by connections to Beijing forged during his pragmatic commercial rise.

FILE PHOTO: Terry Gou, founder and chairman of Foxconn, looks on during an announcement of seeking the nomination of Taiwan's opposition Kuomintang party to run for the island's presidency, in Taipei, Taiwan April 17, 2019. REUTERS/Tyrone Siu

Gou, 68, announced on Wednesday that he would contest Taiwan’s 2020 presidential election, seeking to represent the opposition Kuomintang (KMT) party - a vote that comes after a period of increasing tension between Beijing and the self-ruled island.

After building the world’s largest contract manufacturer from scratch over the past 40 years, Gou’s connections reach as high as Chinese President Xi Jinping and other senior officials. His $40 billion (£30.7 billion) empire has an extensive Chinese footprint of factories producing components for Apple.

The network of Gou, Taiwan’s richest person, also includes extensive U.S. connections, including a friendship with President Donald Trump.

But ties with Taiwan’s key political and security backer are likely to be overshadowed by his ties to a Chinese leadership that refuses to renounce the use of force to unify with an island it considers a wayward province, some analysts and political figures say.

“Because he has a lot of wealth in China ... China has some control over him,” said Shane Lee, a political scientist at Chang Jung University in Taiwan.

“So I think the U.S. government would have to be very cautious about him running for political office.”

Gou was not available for comment. Foxconn did not immediately respond to a request for comment.

Many ordinary Taiwanese are fearful of the intentions of Beijing’s Communist Party towards the staunchly democratic island.

Tensions were highlighted on Monday again as Chinese bombers and warships conducted drills around the island, prompting Taiwan to scramble jets and ships to monitor the Chinese forces.

Some analysts believe that Gou’s ties with Beijing could turn off ordinary voters, who are likely to have to choose between incumbent President Tsai Ing-wen of the independence-leaning Democratic Progressive Party and a KMT candidate.

“He’s one of the smartest businessmen in Taiwan,” said John Brebeck, a senior adviser at Quantum International, a capital markets advisory firm.

“The problem is though is that with so much of his business enterprise in China, it may prove a liability for him with the voters, as they may not be sure where his priorities lie.”

‘TENSIONS WILL EASE’

While most Taiwanese trace their ancestry to China, there remains a clear distinction in society between those who consider themselves “native” Taiwanese, and those whose ancestors came over more recently, most in a wave of refugees who fled to Taiwan at the end of a civil war in 1949, when nationalist forces lost to the communists.

Gou’s parents were born in China and are part of that generation, though he was born in Taiwan.

The Chinese government has not commented on Gou’s decision, which has been widely reported in Chinese state media, though mostly citing Taiwanese press reports.

However, on Thursday Global Times tabloid, published by the Communist Party’s official People’s Daily, welcomed Gou’s bid for power.

“If Terry Gou becomes the leader of the Taiwan region next year, tensions between the two sides will ease, and the situation in the Taiwan Strait, in the short term, is likely to reach a turning point,” it said in an editorial.

The KMT developed closer ties with Beijing when it last held power, focusing on developing business ties. Under Tsai, who came to power in 2016, ties have deteriorated sharply.

China suspects Tsai is pushing for the island’s formal independence - a red line for Beijing. Tsai says she wants to maintain the status quo with China but will defend Taiwan’s security and democracy.

Gou met Xi in 2014 in Beijing, and he was quoted by Taiwan media in 2017 describing Xi as a great leader.

In an interview with the People’s Daily to mark China’s 40th anniversary of reforms last year, Gou said he was happy to have witnessed the changes.

He talked about how his father was from Shanxi province and mother from Guangdong, and how he had first visited China in 1987 to trace his family’s roots, the “first time I had stepped foot on the soil of the motherland”.

“While on the road I saw the scene of reforms and opening up, which made me extremely excited,” he said.

Gou also cited Xi in his interview.

“Xi Jinping has pointed out that it is necessary to promote the deep integration of information technology and the real economy ... I think the general secretary’s point of view is very far-sighted.”

Some in Tsai’s DPP are already eyeing Gou’s China links as a weak spot.

Yao Chia-wen, a senior adviser to Tsai, told Reuters he thought Gou’s bid could create problems, given his business.

“He’s very pro-China and he represents the class of the wealthy people. Will that gain support from Taiwanese?” Yao said.

Reporting By Yimou Lee in TAIPEI, additional reporting by Josh Horwitz in SHANGHAI, Ben Blanchard and Cate Cadell in BEIJING; Writing by Greg Torode and Ben Blanchard; Editing by Robert Birsel